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Complete/answer each of the following problems providing an Excel spreadsheet with the solution to receive full credit. For example, create the loan amortization table for each of the problems.

1- David wants to buy a property for $200,000 and wants an 80% loan. A lender offers a 30 year fully amortizing loan at 6% interest; however, a loan fee of $3,000 will also be needed for David to obtain the loan. a. How much will the lender actually disburse? b. Wat is the APR and the EAR for the borrower, assuming that the mortgage is paid off after 30 years (full term)? c. If David pays off the loan after five years, what is the effective interest rate (EAR)? d. Assume that the lender imposes a prepayment penalty of 2% of the outstanding loan balance if the loan is repaid within eight years of closing. If David repays the loan after five years with the prepayment penalty, what is the effective interest rate (EAR)?

2- Rob is faced with choosing between two loans. Loan A is available for $80,000 at 7% for 30 years, with 6 points to be including in closing costs. Loan B would be for the same amount, but with 8% interest for 30 years, with 3 points to be included in the closing costs. Both loans will be fully amortizing. a. If the loan is repaid after 20 years, which loan would be the better choice? b. If the loan is repaid after 5 years, which loan would be the better choice?

3- A reverse mortgage is made with a balance not to exceed $250,000 on a property valued at $600,000. The loan calls for monthly payments to be made to the borrower for 120 months at an interest rate of 10 percent. a. What would the monthly payments be? b. What will be the loan balance at the end of year 4? c. Assume that the borrower must have monthly draws of $1,800 for the first 50 months of the loan. The remaining draws from months 51 to 120 must be determined so that the $250,000 maximum is not exceeded in month 120. What will draws by the borrower be during the months 51 to 120?

4- A mortgage loan in the amount of $240,000 is made at an interest rate of 10 percent for 20 years. Payments are to be monthly in each part of this problem. a. What will monthly payments be if: i. The loan is fully amortizing? ii. It is partially amortizing and a balloon payment of $50,000 is scheduled at the end of year 20? iii. It is a non-amortizing, or interest-only loan? iv. It is a negative amortizing loan and the loan balance will be $150,000 at the end of year 20? b. What will the loan balance be at eh end of year 5 under parts a.i. through a.iv (previous scenarios)

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